First mortgage business loans: big capital, secured on property

Why does a first mortgage open the biggest, fastest lane?

Because it’s the strongest security a lender can hold. A first mortgage ranks ahead of everyone else on title. If the loan isn’t repaid, the first mortgagee is first in line. That certainty is what allows private lenders to approve large amounts quickly — sometimes in a day or two — when an unsecured lender would need weeks of financial analysis for a fraction of the amount.

For a business owner, it means a property you already own can unlock capital measured in hundreds of thousands or millions, on a timeline measured in hours rather than weeks.

What are first mortgage business loans used for?

Because the amounts are larger, the uses tend to be bigger moves:

• Major working capital — funding a large contract or a growth phase
• Refinancing — clearing several expensive debts into one (refinancing expensive debt)
• Settling an ATO debt before it escalates (ATO debt and BAS)
• Buying a business or a partner’s share (buying a business)
• Bridging — between buying one property and selling another

The common thread is business purpose. These loans aren’t for personal spending.

Private lender or bank?

Feature	Private first mortgage	Bank first mortgage
Speed	Up to $5m possible in 24–48 hours	Often weeks
Focus	Property, amount vs value, exit	Full financials, servicing, credit history
Credit issues, ATO debt	Considered case by case	Often a hard stop
Term	Usually short to medium	Often long
Typical role	Fast capital, bridge, transition	Long-term, lowest-cost debt

Many businesses use both in sequence: a private first mortgage to move quickly, then a refinance to a bank once financials, credit or the property situation allows. That sequence only works if the exit is planned before the first loan is signed.

How fast can it really happen?

The 24–48 hour window is possible when:

• the property title is clean and the address is known up front
• any existing mortgage can be discharged quickly
• the amount is sensible relative to the property’s value
• the exit — sale, refinance or a known payment — is clear and believable
• identification and company documents are ready

The usual slowdowns are a co-owner who isn’t available to sign, an existing lender slow to provide a payout figure, or a property type that needs extra checking. Our page on what slows business funding down lists the rest.

An illustrative example

A family-owned manufacturer has a commercial factory worth well over its existing small mortgage. It’s offered the chance to buy out a competitor’s equipment and customer list, but the deal needs $1.2 million within a week. A private first mortgage refinances the existing bank debt and releases the additional funds, settling within days. Over the following year, with the bigger combined business showing stronger financials, the owners refinance back to a bank on a longer term. (Illustrative only.)

Considering a move like that? Start a confidential enquiry and tell us the deadline.

What costs should you plan for?

We don’t publish rates; private first mortgages are priced on the property, the amount, the term and the exit. Budget for:

• establishment and legal fees
• any title search and settlement agent costs
• interest, which some facilities allow to be prepaid or capitalised
• discharge costs on any existing mortgage
• government registration fees through your state’s land titles office

Ask for the total cost of finance in dollars for the planned term — that’s the number to judge against the opportunity.

Residential or commercial security?

Both work, but they’re assessed a little differently:

	Residential property	Commercial property
Typical examples	Family home, investment house or unit	Factory, warehouse, shop, office
Lender comfort	Generally high; deep resale market	Depends on location, type and leases
What’s checked	Title, ownership, what’s owed	Title, ownership, what’s owed, tenancy and use
Personal considerations	Puts the home behind the business	Keeps the home out of the deal

Commercial property with a solid tenant can be strong security. Specialised property — a purpose-built facility, a rural holding, a mixed-use building — can take a little longer to assess.

Interest options

Private first mortgages often allow flexibility on how interest is handled. It can be paid monthly from cash flow, prepaid at settlement, or added to the loan and repaid at the end. Prepaid or capitalised interest suits deals where the exit is a single event — a sale or a refinance — and the business would rather not carry monthly repayments during the term. Each option changes the total cost, so compare them in dollars.

Refinancing back to a bank

Many private first mortgages are deliberately temporary. If that’s your plan, use the term productively: lodge any overdue returns, clear ATO debt, keep bank statements clean and keep in touch with the bank you intend to refinance to. Start the refinance conversation a few months before the private loan ends, not a few weeks.

Ready to put your property to work?

If there’s property in the picture and the amount is significant, a first mortgage business loan is often the fastest serious capital available. Asking is free and doesn’t involve a credit check. Your enquiry goes to one specialist — not into a pool of lenders — who calls you to talk through the property, the amount and the exit. Please give accurate details of the property and what’s owed on it so we can say quickly what’s achievable. See if your property-backed loan qualifies.